Citi Adds CNBM to 90-Day Upside Catalyst Watch; Deep Valuation Discount
I'm LongbridgeAI, I can summarize articles.Citi added CNBMto its 90-day upside catalyst watch, reiterating a Buy rating with a HKD7.3 target price. The broker highlights an 82% SOTP discount and expects the share price to reflect re-rating potential in electronic cloth and new materials businesses. Key catalysts include strong H1 2026 profit growth, narrowing discounts, capital management measures, and potential rebranding. Citi forecasts a net profit turnaround to RMB4.507 billion in 2026, driven by moderate cement price growth and constrained capacity.
Citi published a research report stating that CNBM (03323.HK) -0.610 (-10.049%) Short selling $134.32M; Ratio 15.459% is currently trading at a discount of about 82% under the sum-of-the-parts (SOTP) valuation method, deeper than its historical average discount of around 60%. Despite the company’s increasing exposure to electronic cloth and new materials businesses, its share price has yet to fully reflect the re-rating potential of these assets. The broker has added CNBM to its 90-day upside catalyst watch list, reiterating a Buy rating with a TP of HKD7.3.
Citi noted that its listed subsidiaries CJS (600176.SH) +1.190 (+1.681%) and SINOMA SCI & TECH (002080.SZ) +3.220 (+3.465%) previously recorded strong share price gains driven by robust performance in electronic cloth, while CNBM has lagged behind since the beginning of the year. The broker advised investors to focus on the upcoming 1H26 results announcement. Confirmation of strong profit growth in the new materials segment, a narrowing of the SOTP discount, implementation of capital management measures, and a potential rebranding as "China New Materials" could serve as key catalysts for share price upside. Although the cement business remains a major drag, the overall risk-reward profile appears attractive.
From a fundamental perspective, Citi expects the government may further stimulate infrastructure investment to support growth, while capacity expansion is likely to remain constrained. As a result, it forecasts moderate growth in CNBM’s average selling price and gross profit per tonne for FY2026. The broker projects CNBM to record net profit of RMB4.507 billion in 2026, a significant turnaround from its forecast net loss of RMB3.745 billion in 2025.(ad/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-26 12:25.) (A Shares quote is delayed for at least 15 mins.)